Kitchen table economics in Illinois are already in a tough spot. In addition to shouldering the highest property tax rate in the U.S (effective rate of 1.87% in 2024), Illinois residents also pay among the highest prices for gasoline, and above average prices for groceries. A 2021 law forcing the early retirement of the state’s natural gas and coal fleets will only put the grid’s reliability in jeopardy while increasing power costs across the board.
The last thing Illinois consumers need on their kitchen tables is a heaping helping of rate increases from their vertically integrated utilities. But that’s exactly what they’re getting.
Utilities are stuffing ratepayer utility bills with the cost of expensive grid upgrades. In fact, utility spending on transmission and distribution is the fastest growing component of electricity bills, according to a recent report by Energy Tariff Experts. In 2024 alone, utilities spent a record $178.2 billion, and they plan to spend another $1.1 trillion by 2029.
Consumers in Illinois and across the country are already paying for those grid upgrades and more are coming. With the recent passage of the “Clean and Reliable Grid Affordability Act” and its 3GW storage mandate, Illinois consumers will be paying approximately $1 billion for storage baked into their ComEd and Ameren bills. ComEd’s parent, Exelon, wants to keep adding to that bill by asking state regulators to allow them to rate-base generation throughout the PJM region. Meaning customers would be on the hook for more bill increases.
To allow utilities like Exelon to become vertically integrated systems again would toss out the nearly 30 years of cost savings competitive markets have provided to customers in Illinois and throughout the PJM region. Competitive power markets remain the best way to provide reliable, low-cost electricity. The billions in annual savings just in PJM are significant.
These markets help to keep prices low because independent power producers compete and innovate in order to supply electricity at the lowest cost and consumers receive the benefits. Unlike vertically integrated utilities, independent power producers shoulder the risk of building new generation and do not assess captive customers for the costs of new construction. If projects face construction delays, supply chain issues, or other challenges, it’s the investors who pay, not Illinois consumers. Competitive power producers also have a proven track record of bringing generation online that is lower cost, lower emitting, and more reliable, which is just the gravy on top.
Bottom Line: Competition benefits Illinoisans by keeping prices low and shifting risk off consumers while ensuring that there’s enough generation to meet the growing demand.
